NeuLevel was chosen by the internet's technical co-ordination
body, the Internet Corporation for Assigned Names and Numbers
(ICANN), to deal with the registration of the .biz domains in
2001.
The allocation process adopted by NeuLevel was based on parties
paying an application fee of about $2 to reserve a particular
domain name during a specified period. However, applicants were not
given any domain name rights until the end that period and if more
than one request was made for the same domain, then the rights to
that domain were determined by a lottery.
In a class-action lawsuit filed in 2001, Arizona radio DJ Dave
Smiley and Skyscraper Productions, a Los Angeles-based company,
accused NeuLevel of running an illegal lottery, because the company
was accepting payment from prospective domain name holders without
granting them rights to specific domains.
They argued that the process encouraged applicants to make
several applications and payments for each domain name in an
attempt to increase their chances of success in the event of the
right to a name being determined randomly.
In October 2001, a Californian court issued a temporary order
barring NeuLevel from allocating 53,000 .biz domain names. Although
the order was later lifted, the company paid $1.7 million to those
who had applied for the disputed names, and made the names
available again without application fees, on a first-come,
first-served basis.
The settlement of the class action suit will cover approximately
25,000 applicants who have not yet received refunds.
